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The Zacks Analyst Blog Highlights: EQT, SBOW, COG, SWN and CRK

Zacks Equity Research
·5 min read

For Immediate Release

Chicago, IL – December 24, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include EQT Corporation EQT, SilverBow Resources SBOW, Cabot Oil & Gas Corporation COG, Southwestern Energy Company SWN and Comstock Resources CRK.

Here are highlights from Friday’s Analyst Blog:

Nat Gas Loses 6.7% on the Week: Here's What Happened

The U.S. Energy Department's weekly inventory release showed a lower-than-expected decrease in natural gas supplies. This bearish withdrawal, coupled with unfavorable weather predictions, meant that the U.S. benchmark lost nearly 7% last week.

Let us see how the natural gas situation looks like after the U.S. Energy Department's latest weekly inventory release:

EIA Reports a Withdrawal Smaller Than Market Expectations

Stockpiles held in underground storage in the lower 48 states fell by 152 billion cubic feet (Bcf) for the week ended Dec 18 compared to the guidance (of a 154 Bcf decline). However, the decrease was above the five-year (2015-2019) average net shrinkage of 127 Bcf and last year’s drop of 146 Bcf for the reported week.

The latest official data puts total natural gas stocks at 3.574 trillion cubic feet (Tcf), which is 278 Bcf (8.4%) above the 2019 levels at this time and 218 Bcf (6.5%) higher than the five-year average.

Total supply of natural gas averaged 95.7 Bcf per day, essentially unchanged on a weekly basis as higher dry production was offset by lower shipments from Canada.

Daily consumption — at 112.2 Bcf — remained flat too, with an increase in residential/commercial gas usage offset by a dip in power demand.  

Natural Gas Price Drifts Lower

Natural gas prices fell last week following the lower-than-expected inventory draw. Futures for January delivery ended Christmas Eve at $2.5180 per MMBtu on the New York Mercantile Exchange, down 6.7% from the same time previous week. The decrease in the price of natural gas is also the result of forecast models, indicating warmer-than-normal weather in the days ahead, which translates into smaller draws due to less use of heaters.

Wrap-Up

As is the norm with natural gas, changes in temperature and weather forecasts can lead to price swings. With the latest models showing bearish changes toward a less chiller outlook, prices are expected to trend lower. As it is, with stockpiles still bloated, downside risks would continue to outweigh the upside potential unless the weather pattern flips significantly to colder for natural gas usage to rise. While growing LNG exports and lower production are providing some support for a price recovery, it will be the magnitude of the cold across the United States that will dictate the energy commodity’s future.   

The lingering uncertainty over the heating fuel means that most natural gas-focused companies carry a Zacks Rank #3 (Hold). As a result, investors should preferably wait for a better entry point before buying shares in the likes of EQT Corporation, SilverBow Resources, Cabot Oil & Gas Corporation and Southwestern Energy Company. Others like Comstock Resources are further down the pecking order, with a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.


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Comstock Resources, Inc. (CRK) : Free Stock Analysis Report
 
EQT Corporation (EQT) : Free Stock Analysis Report
 
Southwestern Energy Company (SWN) : Free Stock Analysis Report
 
Cabot Oil & Gas Corporation (COG) : Free Stock Analysis Report
 
SilverBow Resources Inc. (SBOW) : Free Stock Analysis Report
 
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Zacks Investment Research